5 Financial Wellness Moves Every Family Should Master

(BPT) – If you had to grade your financial literacy, what would it
be? Are you an A+ saver, investor and planner, or do you think you could
do better? If you grade yourself average at best, you’re not alone.

When
asked to grade their own financial literacy, more than half of
Americans say they’d earn a “C” or lower, according to new data from
Prudential Financial. This isn’t surprising, considering data from
Prudential’s Financial Wellness Census shows less than half of Americans
are on track to meet their financial goals, including planning for
retirement.

“Regardless of where you are on your family’s
financial wellness journey, the best way forward is through financial
literacy,” says Prudential Advisors President Brad Hearn. “Researching,
educating yourself and getting advice from a financial professional can
help you make the best decisions based on your life stage, risk
tolerance and goals.”

Hearn says each family’s situation and goals
are unique, and things like life stage and personal preference will
impact how they choose to prepare for their financial future. To get
started, here are five financial wellness basics every family should
master:

Set up an emergency fund

Life is a
series of experiences, and sometimes the unexpected can hit your
finances hard. Whether it’s a car breaking down, your AC unit on the
fritz or even losing a job, it’s important to be prepared for
emergencies. If you don’t already have an emergency fund, start saving a
little each month until you reach your goal. A good rule of thumb is to
have three months’ worth of expenses saved in an emergency fund. So, if
your monthly expenses are $2,500, you should have $7,500 saved.

Create a budget

Saving
for college? A new car? How about starting that emergency fund?
Whatever your family’s financial goals are, it’s important to have a
plan in place that helps you achieve those goals. Budget to manage
day-to-day expenses, and include in that budget a commitment to save for
bigger milestones. For tips on getting started, do some research.
There’s no shortage of advice, whether you decide to go it alone or
consider using the help of a professional financial advisor.

Plan for the unimaginable

If
you have people who count on you for financial support or caregiving,
you should have life insurance. A life insurance policy can help give
your family financial peace of mind should the worst happen. There is no
rule as to how much life insurance you need, but important things to
consider are your annual income, mortgage debt, potential college costs
for kids and other future financial obligations.

Save for retirement

According
to Prudential data, of Americans who have retirement savings and debt,
nearly one-quarter have more in total debt than in retirement savings
(23%), while 15% of Americans say that they have no debt, but also have
nothing saved for retirement. Planning for retirement is something that
should start as soon as possible. If your work offers any type of
matching program, make sure to take advantage. If you don’t, you’re
essentially leaving free money on the table.

Seek professional advice

Retirement,
life insurance and savings can be confusing. Information overload is
partly to blame. According to Prudential data, two-thirds of Americans
agree that the list of things they need to learn to successfully manage
their finances keeps growing, not shrinking. That’s where financial
literacy programs and professional financial advice can play a key role.
Nearly two-thirds of Americans don’t have a financial advisor. They say
they cannot afford one (42%) or don’t believe their financial situation
warrants needing an advisor’s help (26%). The reality is that advice is
more within reach than ever before — and it’s not just for the wealthy.
A financial professional can help at various stages in life and work
with you to create a strategy based on your timeline, risk tolerance and
goals.

“Financial wellness isn’t always a matter of having more
money,” says Hearn. “Instead, it’s a journey that takes a combination of
proactive effort, dedication and professional guidance.”

Prudential
Advisors is a brand name of The Prudential Insurance Company of America
and its subsidiaries. Life insurance is issued by The Prudential
Insurance Company of America, Newark, NJ and its affiliates.

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